Potential buying opportunity for solar stocks less exposed to IRA under Republican administration

From Investing.com: 2024-07-13 03:01:02

As the 2024 U.S. presidential election nears, investors are worried about the impact on solar stocks. RBC Capital analysts believe the current environment could be a buying opportunity for select names less exposed to the Inflation Reduction Act (IRA) or those benefiting from protectionist policies under a Republican administration.

Clean energy stocks, including the iShares Global Clean Energy ETF (ICLN), have declined around 13% year-to-date, underperforming the market by 29%. RBC points out that this decline intensified after the presidential debate, which saw increased Republican support.

Concerns about the future of the IRA have risen with the possibility of a Republican victory, although a full repeal is considered unlikely due to bipartisan support for job-creating benefits in non-Democratic districts. However, uncertainty remains around potential partial repeals.

Domestic manufacturers like First Solar could benefit from protectionist policies under a Republican administration, while companies reliant on foreign imports like Enphase, Shoals, and SolarEdge may face challenges due to higher input costs from tariffs. The Biden administration’s incentives-focused approach has favored companies dependent on cheaper imports.

Despite potential headwinds from a Republican administration, RBC anticipates solid support at the state level for renewable energy requirements, which could help counterbalance any increased volatility in the industry.



Read more at Investing.com: What happens to solar stocks if Trump wins? RBC weighs in By Investing.com